MILBERG WEISS BERSHAD
HYNES & LERACH LLP
WILLIAM S. LERACH (68581)
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
     - and -
REED R. KATHREIN (139304)
LISA C. ATKINSON (163320)
DAVID R. STICKNEY (188574)
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545

BARRACK, RODOS & BACINE
EDWARD M. GERGOSIAN (105679)
MATTHEW P. MONTGOMERY (180196)
600 West Broadway, Suite 1700
San Diego, CA 92101
Telephone: 619/230-0800

KAUFMAN, MALCHMAN, KIRBY
& SQUIRE, LLP
JEFFREY H. SQUIRE
IRA M. PRESS
919 Third Avenue, 11th Floor
New York, NY 10022
Telephone: 212/371-6600

Attorneys for Movants
[Additional counsel appear on signature page.]

I. INTRODUCTION

II. STATEMENT OF FACTS

III. PROCEDURAL BACKGROUND

IV. THE PROPOSED LEAD PLAINTIFFS ARE THE MOST ADEQUATE PLAINTIFFS UNDER THE EXCHANGE ACT

A. The Proposed Lead Plaintiffs Satisfy The Require-ments Of The PSLRA For Appointment As Lead Plaintiff

B. The Proposed Lead Plaintiffs Are Qualified Under Rule 23

1. The Claims Of The Proposed Lead Plaintiffs Are Typical Of The Claims Of The Class

2. The Proposed Lead Plaintiffs Will Fairly And Adequately Represent The Interests Of The Class

V. THIS COURT SHOULD APPROVE THE PROPOSED LEAD PLAINTIFFS' CHOICE OF CO-LEAD COUNSEL

VI. CONCLUSION

TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

PLEASE TAKE NOTICE that on April 10, 1998, at 9:30 a.m., or as soon thereafter as the matter may be heard, in the courtroom of the Honorable Charles A. Legge, United States District Court, Northern District of California, located at 450 Golden Gate Avenue, San Francisco, California, plaintiffs and the other individuals identified in Appendix A attached hereto ("Movants" or the "Khaled Group"), who purchased no less than 120,997 shares of Electronics For Imaging, Inc. ("EFI") common stock and/or other securities, including call options between April 10, 1997 through December 11, 1997 (the "Class Period"), and have collectively suffered losses of over $2.8 million will, and hereby do move this Court for an order granting Movants' Motion To Be Appointed Lead Plaintiffs Pursuant to §21D(a)(3)(B) of the Securities Exchange Act of 1934 and For Appointment of Lead Plaintiffs' Co-Lead Counsel (the "Motion").

This Motion is brought pursuant to §21D of the Securities Exchange Act of 1934 (the "Exchange Act") on the grounds that Movants have timely filed and are the "most adequate plaintiffs." In addition, Movants seek the Court's approval of their selection of Milberg Weiss Bershad Hynes & Lerach LLP ("Milberg Weiss"), Barrack, Rodos & Bacine ("Barrack Rodos") and Kaufman, Malchman, Kirby & Squire, LLP ("Kaufman, Malchman") as Co-Lead Counsel for the class pursuant to §21D(a)(3)(B)(v) [15 U.S.C. §78u-4(a)(3)(B)(v)].

This Motion is based on this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities in support of the Motion, the Declaration of Edward M. Gergosian, the pleadings and other files herein, and such other written or oral argument as may be permitted by the Court.

I. INTRODUCTION

On December 15, 1997, a class action complaint was filed in the Superior Court for the County of San Mateo (Steele v. Electronics For Imaging, Inc., No. 403099) on behalf of all persons who purchased the common stock of EFI ("EFI" or the "Company") between April 10, 1997 and December 11, 1997 (the Steele action). On December 16, 1997, notice issued through the Business Wire of the existence of the Steele action and its allegations that defendants' failure to disclose, inter alia, the serious and dramatic build-up of unsold inventory in EFI's distribution channels caused the market price of EFI stock to be artificially inflated.

Subsequently, on December 31, 1997, a virtually identical copycat class action was filed in this Court by the law firm of Weiss & Yourman on behalf of plaintiffs James C. Smith and Efren Rivera.

On January 2, 1998, Smith's counsel published notice of the pendency of the above-captioned action which notified class members of their right to move to be appointed lead plaintiff[s] and to designate their choice of lead counsel. Pursuant to that notice, and as provided by statute 15 U.S.C. §78u-4(a)(3)(B), movants submit this memorandum in support of their motion for the appointment of all Movants as Lead Plaintiffs in these related actions or, alternatively, Richard A. Bader, Richard Hughes, Meir Kadec, Jeff Scislow and Joseph Toms as Lead Plaintiffs in this action; appointment of their counsel, Milberg Weiss Bershad Hynes & Lerach LLP, Barrack, Rodos & Bacine, and Kaufman, Malchman, Kirby & Square LLP as Lead Counsel for the class; and approval of Movants' choice of Co-Lead Counsel in the above-related actions and any other actions that may be consolidated therewith in the future.

Collectively, these class members purchased 120,997 shares of EFI common stock during April 10, 1997 through December 11, 1997 (the Class Period"), and collectively, these moving class members suffered damages of over $2.8 million (see Declaration of Edward M. Gergosian in Support of Motion for Appointment of The Khaled Group as Lead Plaintiffs and Approval of Lead Plaintiffs' Lead Counsel ("Gergosian Decl."), Ex. 1 and supporting documents filed herewith by the moving class members), giving the Khaled Group by far the largest economic stake in the outcome of the case.

Section 21D of the Exchange Act, as recently amended, sets forth the procedure for the selection of lead plaintiffs to oversee class actions brought under the federal securities laws.⁽¹⁾ Specifically, §21D(a)(3)(A)(i) provides that, within 20 days after the date on which a class action is filed under the PSLRA,

the plaintiff or plaintiffs shall cause to be published, in a widely circulated national business-oriented publication or wire service, a notice advising members of the purported plaintiff class --

(I) of the pendency of the action, the claims asserted therein, and the purported class period; and

(II) that, not later than 60 days after the date on which the notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class.

15 U.S.C. §78u-4(a)(3)(A)(i).⁽²⁾

Further, §21D(a)(3)(B) of the Exchange Act directs the Court to consider any motions by plaintiffs or class members to serve as lead plaintiffs in response to any such notice by not later than 90 days after the date of publication pursuant to §21D, or as soon as practicable after the Court decides any pending motion to consolidate any actions asserting substantially the same claim or claims. Under this section of the Exchange Act, the court "shall" appoint the "most adequate plaintiff," and is to presume that plaintiff is the person, or group of persons, which

(aa) has either filed the complaint or made a motion in response to a notice . . .;

(bb) in the determination of the court, has the largest financial interest in the relief sought by the class; and

(cc) otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure.

15 U.S.C. §78u-4(a)(3)(B)(iii)(I).

Movants collectively purchased no less than 120,997 shares of EFI between April 10, 1997 and December 11, 1997, inclusive, and have incurred out of pocket losses of no less than $2.8 million. See Summary of Movants' Purchases, Sales/Losses attached as Ex. 1 to the Gergosian Decl.⁽³⁾ Movants therefore have a very substantial financial interest in the relief sought by the class. Movants also satisfy the requirement of Rule 23 of the Federal Rules of Civil Procedure because their claims are typical of the claims of the class, and they will fairly and adequately represent the interest of the class since their interests are clearly aligned with the members of the class and they have retained experienced class counsel to represent the class.

Accordingly, Movants are "the most adequate plaintiffs," as defined in the PSLRA, and they bring this motion seeking that all Movants be appointed Lead Plaintiffs or, alternatively, that Richard A. Bader, Richard Hughes, Meir Kadec, Jeff Scislow and Joseph Toms, be appointed Lead Plaintiffs. Movants also request the Court to approve their choice of Milberg Weiss, Barrack Rodos and Kaufman, Malchman as Co-Lead Counsel.

II. STATEMENT OF FACTS

This case is a securities class action against EFI and certain of its officers and directors. Plaintiffs, purchasers of EFI stock during the Class Period, allege that defendants fraudulently inflated the price of EFI's stock via false and misleading statements about EFI's business. At the same time, defendants sold over 200,000 shares of EFI stock, reaping almost $12 million.

EFI is headquartered in San Mateo, California, and develops, markets and supplies products and technologies that enable digital color printing over computer networks. Beginning in early 1997, defendants became aware that EFI was not meeting its deadlines for developing new products. Defendants knew that these delays would result in a sharp decline in EFI's revenues because EFI's customers already had large inventories of EFI's older products and would buy little more of them.

Rather than disclose the above information, defendants made a series of positive -- but false or misleading -- representations about EFI in press releases, SEC filings and other public statements. Defendants' false or misleading statements inflated EFI's stock as high as $56.50 per share.

The defendants took advantage of this fraudulent inflation of EFI's stock price to sell their EFI stock as follows:

                    Shares           Aggregate 
Defendants           Sold             Proceeds 

Avida               65,000          $ 3,532,500
Lenches             90,008            4,805,426
Rosenzweig          32,500            1,706,250
Saltzman            33,500            1,742,000

    Total:         221,008          $11,786,176

After dumping their shares at inflated prices, on December 11, 1997, defendants finally told the public what they had known all along: that the delay in development of EFI's new products and its customers' large inventories of its older products would prevent EFI from meeting analysts' predictions. In response to these disclosures, the market price of EFI plummeted 60% on December 12, 1997, to as low as $15.625 per share.

III. PROCEDURAL BACKGROUND

As amended by the PSLRA, §21D(a)(3)(A)(i) of the Exchange Act requires early notice to advise class members of their right to move this Court to be appointed "lead plaintiff," and provides that any member or members of the class may so request this within 60 days of publication of the early notice. Further, §21D(a)(3)(B)(i) of the Exchange Act requires that the Court decide this motion within 90 days from the date of the publication of the early notice in the Smith action.

The Smith action was filed on December 31, 1997. A press release notifying the class members of their right to file a motion for appointment as lead plaintiffs within sixty days was issued through the Business Wire on January 2, 1998. See Gergosian Decl., Ex. 5. This motion is filed within the sixty-day period set forth in the PSLRA.

IV. THE PROPOSED LEAD PLAINTIFFS ARE THE MOST ADEQUATE PLAINTIFFS UNDER THE EXCHANGE ACT

A. The Proposed Lead Plaintiffs Satisfy The Require-ments Of The PSLRA For Appointment As Lead Plaintiff

The "most adequate plaintiff" provision of the PSLRA provides that a court

shall appoint as lead plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members (hereafter in this paragraph referred to as the "most adequate plaintiff") in accordance with this subparagraph.

15 U.S.C. §78u-4(a)(3)(B)(i). Moreover, the Exchange Act, as amended by the PSLRA, provides

that the most adequate plaintiff in any private action arising under this chapter is the person or group of persons that --

(aa) has either filed the complaint or made a motion in response to a notice . . .;

(bb) in the determination of the court, has the largest financial interest in the relief sought by the class; and

(cc) otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure.

15 U.S.C. §78u-4(a)(3)(B)(iii)(I). Thus, a "member or members" of the class or a "person or group of persons" may combine to constitute "the largest financial interest" and thereby jointly serve as the "most adequate plaintiff." Id.; see In re Diamond Multimedia Systems, Inc., Sec. Litig., No. C-96-2644-SBA, slip op. at 2-4 (N.D. Cal. Jan. 13, 1997) (proposed lead plaintiffs can pool together their shares to form the largest financial interest), Gergosian Decl., Ex. 6.⁽⁴⁾

Pursuant to §21D(a)(3)(B) of the Exchange Act, Movants respectfully request that all Movants be appointed Lead Plaintiffs, or alternatively, that Richard A. Bader, Richard Hughes, Meir Kadec, Jeff Scislow and Joseph Toms be appointed Lead Plaintiffs (hereinafter referred to as the "Proposed Lead Plaintiffs"), in these related actions.⁽⁵⁾ The Proposed Lead Plaintiffs also respectfully request that the Court approve their selection of Co-Lead Counsel for the class.

During the Class Period, the Proposed Lead Plaintiffs collectively purchased no less than 120,997 shares of EFI stock at prices artificially inflated by defendants' false and misleading statements and have collectively suffered losses in excess of $2.8 million. See Summary of Movants' Purchases, Sales/Losses, attached as Ex. 1 to the Gergosian Decl.⁽⁶⁾

The Proposed Lead Plaintiffs are qualified to represent the proposed class. Each of them has signed and filed a sworn certification of their review of the complaint and authorization of its filing, and is willing to serve as a representative party on behalf of the class. In addition, the Proposed Lead Plaintiffs have selected and retained counsel highly experienced in prosecuting securities class actions such as this to represent them. See the firm resumes of Milberg Weiss, Barrack Rodos and Kaufman, Malchman, attached as Exs. 13-15 to the Gergosian Decl.

Accordingly, Proposed Lead Plaintiffs satisfy the prerequisites for appointment as "lead plaintiffs" pursuant to §21D(a)(3)(B).

B. The Proposed Lead Plaintiffs Are Qualified Under Rule 23

Section 21D(a)(3)(B)(iii)(I)(cc) of the Exchange Act provides that the lead plaintiff or plaintiffs must also "otherwise satisf[y] the requirements of Rule 23 of the Federal Rules of Civil Procedure." With respect to the qualifications of the class representative, Rule 23(a) requires that the claims be typical of the claims of the class and that the representative will fairly and adequately protect the interests of the class.

As detailed below, each of the Proposed Lead Plaintiffs satisfies the typicality and adequacy requirements of Rule 23(a), thereby justifying the appointment of the Proposed Lead Plaintiffs.

1. The Claims Of The Proposed Lead Plaintiffs Are Typical Of The Claims Of The Class

The typicality requirement of Rule 23(a)(3) is satisfied when a named plaintiff has: (a) suffered the same injuries as the absent class members; (b) as a result of the same course of conduct by defendants; and (c) their claims are based on the same legal issues. See, e.g., In re Cirrus Logic Sec. Litig., 155 F.R.D. 654, 657 (N.D. Cal. 1994); In re Activision Sec. Litig., 621 F. Supp. 415, 428 (N.D. Cal. 1985).

The claims asserted by the Proposed Lead Plaintiffs are typical of the claims of the members of the proposed class. Each of the Proposed Lead Plaintiffs, as do all members of the class, allege that certain of EFI's directors and high ranking officers violated the Exchange Act by publicly disseminating false and misleading statements about EFI during the Class Period. Each of the Proposed Lead Plaintiffs, as did all of the members of the proposed class, acquired EFI securities at prices inflated by defendants' misrepresentations and omissions and was damaged thereby. Typicality exist here because the claims asserted by the Proposed Lead Plaintiffs are based on the same legal theory and arise "from the same event or course of conduct giving rise to the claims of other class members." In re United Energy Corp. Solar Power Modules Tax Shelter Inv. Sec. Litig., 122 F.R.D. 251, 256 (C.D. Cal. 1988). Accord Blackie v. Barrack, 524 F.2d 891, 902-03 & n.19 (9th Cir. 1975).

2. The Proposed Lead Plaintiffs Will Fairly And Adequately Represent The Interests Of The Class

The interests of the Proposed Lead Plaintiffs are clearly aligned with the members of the proposed class, and there is no evidence of any antagonism between the interests of these individuals and the proposed class members. As detailed above, the Proposed Lead Plaintiffs share substantially similar questions of law and fact with the members of the proposed class, and their claims are typical of the members of the class. The Proposed Lead Plaintiffs have amply demonstrated their adequacy as class representatives by signing a certification, filed with the Court, affirming their willingness to serve as and assume the responsibilities of a class representative. In addition, the Proposed Lead Plaintiffs have selected counsel highly experienced in prosecuting securities class actions such as this to represent them.

V. THIS COURT SHOULD APPROVE THE PROPOSED LEAD PLAINTIFFS' CHOICE OF CO-LEAD COUNSEL

The PSLRA vests authority in the lead plaintiffs to select and retain lead counsel, subject to court approval. See 15 U.S.C. §78u-4(a)(3)(B)(v). Thus, the Court should not disturb the Lead Plaintiffs' choice of counsel unless necessary to "protect the interests of the class." 15 U.S.C. §78u-4(a)(3)(B)(iii)(II)(aa). The Proposed Lead Plaintiffs have selected the law firms of Milberg Weiss, Barrack Rodos and Kaufman, Malchman to serve as Co-Lead Counsel for the class. These firms possess extensive experience in the area of securities litigation and have successfully prosecuted numerous securities fraud class actions on behalf of injured investors. See Gergosian Decl., Exs. 13-15. Thus, the Court may be assured that, in the event this motion is granted, the members of the class will receive the highest caliber of legal representation available.

VI. CONCLUSION

For all the foregoing reasons, Movants respectfully request that the Court: (a) appoint all Movants as Lead Plaintiffs, or alternatively, Richard A. Bader, Richard Hughes, Meir Kadec, Jeff Scislow and Joseph Toms as Lead Plaintiffs in the above-captioned related actions, pursuant to §21D(a)(3)(B); and (b) approve the Proposed Lead Plaintiffs' choice of Milberg Weiss, Barrack Rodos and Kaufman, Malchman as Co-Lead Counsel for the class.

EFII\RK03537.BRF

1. Congress amended the Exchange Act by the Private Securities Litigation Reform Act of 1995 ("PSLRA"). These amendments are contained in §21D of the Exchange Act, 15 U.S.C. §78u-4. A copy of §21D of the Exchange Act, 15 U.S.C. §78u-4, is attached as Ex. 2 to the Gergosian Decl., filed concurrently herewith.

2. All emphasis herein is added unless otherwise indicated.

3. The Certifications of the members in the Khaled Group are attached as Ex. 4 to the Gergosian Decl.

4. See also City Nominees Ltd. v. Macromedia, Inc., No. C-97-3521-SC, slip op. at 5-7 (N.D. Cal. Jan. 23, 1998) (same); In re Read-Rite Corp. Sec. Litig., No. C-97-20059-RMW, slip op. at 4-5 (N.D. Cal. May 23, 1997) (same); Malin v. IVAX Corporation, et al., No. 96-1843-CIV-MORENO, slip op. at 4-8 (S.D. Fla. Nov. 1, 1996) (holding the plaintiff group with the largest number of shares is the most adequate plaintiff under the PSLRA); Zuckerman v. Foxmeyer Health Corp., No. 3:96-CV-2258-T, slip op. at 5 (N.D. Tex. Mar. 28, 1997) (eleven individual plaintiffs with the largest financial interest collectively appointed lead plaintiff); Chan v. Orthologic Corp., No. CIV 96-1514 PHX RCB, slip op. at 13 (D. Ariz. Dec. 19, 1996) (plaintiffs from five separate actions collectively appointed lead plaintiff); Powers v. Eichen, Civ. No. 96-1431-B(AJB), slip op. at 1 (S.D. Cal. Nov. 15, 1996) (eight individual plaintiffs collectively appointed lead plaintiff), Gergosian Decl., Exs. 7-12.

5. Plaintiffs also respectfully request an order authorizing Lead Plaintiffs and their Co-Lead Counsel to designate one or more Lead Plaintiffs to give testimony on behalf of the class in subsequent proceedings to streamline the proceedings and avoid unnecessary and costly discovery or expense to the class.

6. The losses collectively suffered by Richard A. Bader, Richard Hughes, Meir Kadec, Jeff Scislow and Joseph Toms total $842,988. Gergosian Decl., Ex. 3.

I, the undersigned, declare:

1. That declarant is and was, at all times herein mentioned, a citizen of the United States and a resident of the County of San Diego, over the age of 18 years, and not a party to or interested in the within action; that declarant's business address is 600 West Broadway, Suite 1800, San Diego, California 92101.

2. That on March 2, 1998, declarant served the THE KHALED GROUP'S NOTICE OF MOTION AND MOTION TO BE APPOINTED LEAD PLAINTIFFS PURSUANT TO §21D(a)(3)(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND FOR APPOINTMENT OF LEAD PLAINTIFFS' CO-LEAD COUNSEL by depositing a true copy thereof in a United States mailbox at San Diego, California in a sealed envelope with postage thereon fully prepaid and addressed to the parties listed on the attached Service List and that this document was forwarded to the following designated Internet site at:

3. That there is a regular communication by mail between the place of mailing and the places so addressed.

I declare under penalty of perjury that the foregoing is true and correct. Executed this 2nd day of March, 1998, at San Diego, California.